Patent Puzzle

WHAT DOES IT COST TO GET A PATENT

Richard Gearhart — Thu, 10 May 2012 11:35:34 -0500

There are two stages to getting a patent, each with its own set of fees. The first stage is the filing stage. The second stage is the prosecution stage, which usually occurs approximately 18 to 36 months after the filing stage.

There are filing fees and attorney’s fees associated with filing a patent. Filing fees are fees you pay to the USPTO (United States Patent and Trademark Office) for filing your patent in their databases. These fees may increase slightly year to year, but for 2012 the cost for an individual inventor or for a company with less than 500 employees are:

$125 to file a provisional patent
Approximately $650 to file a utility patent application (depends on the number of claims, number of pages etc)
$ 265 to file a design patent application
Approximately $3000 to file an international patent application (depends on number of claims, number of pages, and of selected searching authority)

Attorney’s fees to file patent vary depending on the complexity of the invention and the amount and type of existing prior art. Fees are usually charged on hourly basis. The attorney will be able to give an estimate once you have discussed with him or her.

Attorney fees cover the actual writing of the patent, which includes:

Drafting the claims – the claims capture the essence of your idea in broad terms. The claims are the most important part of the patent, and must be drafted correctly for maximum protection of your idea. The form of the claims depends also on what kind of patent you are seeking: claims for international applications may look different than the ones for a utility application in the U.S.
Obtaining the proper drawings – a patent attorney usually uses a draftsman, who takes your sketches or ideas and turns them into drawings that meet all of the patent office’s criteria. Getting the drawings correct on first time is especially important when you file a design patent, because the drawing illustrates your invention.
Drafting the specification- this part of the patent uses the drawings and your ideas to describe your invention in detail, and it is as comprehensive as possible to further protect you patent’s validity.
Filing out the proper forms and submitting them to the patent office, with the proper filing fees.

A provisional application is never examined, it will expire in 12 months, and before that you should convert the provisional application into a utility or an international application. Benefits of a provisional application and the process of an international application are discussed in separate blogs.

Usually within about eighteen to thirty six months after the filing date of the utility application, an examiner at the patent office reviews the application, and typically rejects some of the claims. At this point the prosecution begins. Prosecution is the act of arguing the validity of the patent with the patent examiner, with the goal of convincing him or her to allow as many claims as possible, with as broad scope as possible. The attorney fees for this phase are variable depending largely on the contents and basis of the rejections the examiner made.

So, how much does it cost to get a patent? The attorney’s answer is ‘It depends’. It depends on what kind of application you want to file, do you want to have an international or US application, how complex is the prosecution, i.e. what are the contents of the office action, and so on. When you have an invention, the best estimate of the costs you would get by contacting the attorney, explaining him or her invention, and planning a best strategy for protection with the attorney.

The bottom line is that there are two phases of fees, the fees of the preparation and filing phase at the time the application is filed, and prosecution fees that incur after about eighteen to thirty six months after the filing.

Once the utility patent is issued there will be a set of maintenance fees during the life of the patent. First maintenance fee is due during the fourth year after filing, second one is due during the eight year after filing and the last maintenance fee is due on the twelfth year after the filing. By paying the maintenance fees timely gives the patent a life of twenty years from the filing.

Can I patent a recipe - or eat cardboard?

Richard Gearhart — Mon, 16 Apr 2012 10:13:57 -0500

Can I patent a recipe – or eat cardboard?

By Roy Rosser

The first question I am often asked. The second – not so much. My answer to both is, however, the same. In principle “Yes” – but why would you even try to?

The US Patent Office (USPTO) has a stack of patented inventions classified as “Food or Edible Material: Processes, Composition, and Products”, (Class 426). So recipes can – and are patented– but, before calling your patent attorney, there are few laws you may want to consider, both patent and common sense.

To be patentable in the US, an invention must be both novel and unobvious.

Cookbooks date back to at least the founding of the Roman Empire, so there is a great deal of what patent practitioners call “prior art”, i.e., publications that may describe your invention, or something close enough to it, to make your invention “not novel”. No matter how unique and flavorful your “lamb/lobster stew with quince and pomegranates” seems to you, odds are there is already a published a recipe for it, simply because there are so many published recipes. The publication may have been in a book, a magazine or a newspaper, in any country in the world and in any language, because legal novelty in the US is considered globally.

Even if your recipe does turn out to be “novel”, there is a further, more challenging, hurdle of being “unobvious”. “Unobvious” means that although no-one has published your exact recipe, if there are published recipes that could be combined together to produce, or suggest how to produce, all the steps of your recipe, you won’t get a patent.

In addition to these formidable legal obstacles, there are further, practical questions.

Finally, how will you know if anyone is infringing your patent? No chef is likely to tell you how they prepare their dishes, so you’ll need some tricky detective work to find infringers. When you do find and notify them of your patent, as required by law, they may simply stop using your recipe, and avoid paying you anything. No restaurant lives by any single dish.

So why does the US Patent Office have Class 426? The answer appears to be in the second question: “Can you eat cardboard?”

Browsing Class 426 patents, it is quickly apparent that they mostly cover industrial scale cooking, and tend to fall into the categories of ingredient substitution, food preservation, automated production or storage and packaging. As a hypothetical example, a Class 426 patent may cover the ingredients and methods used in producing large quantities (100,000’s) of “cookies” without using any actual sugar, eggs, milk or flour, but, thanks to substitute ingredients, the “cookies” will have an unrefrigerated shelf life of at least six months, and still look appealing and have an enjoyable, “fresh” taste, at least to children.

“Eating cardboard” is, however, not merely a metaphor to describe some of the less successful Class 426 inventions.

Issued US patent 6,936,291 makes the point that “cellulose-based films” include paper and cardboard. The inventors admit that “cellulose-based films” are conventionally “not desired components of comestibles” (Lawyer Speak for (LSF): “people don’t like cardboard as food”) and that they have “low organoleptic acceptance” ((LSF): “people don’t like the taste, color or odor of cardboard”.

The title of their patent, however, is “Method of Producing Edible Cellulosic Films” ((LSF): “How to make cardboard that people will eat”).

Check out the patent for yourself (http://bit.ly/HqTjuU). That way, when “a high organoleptic acceptance comestible made of a cellulose-based film” appears at your local supermarket, you can impress the checkout clerk by telling them how it’s made – or not.

Do I need a Trademark?

Richard Gearhart — Tue, 03 Apr 2012 12:10:58 -0500

By Susanne Somersalo, Ph.D; Esq.

Aside patent protection, a trademark may be a good alternative or addition to protect your product or service. Because a federal trademark registration is valid as long as it is used and the renewal fees are paid, a trademark may be an excellent tool to extend protection beyond the limited lifetime of a patent. The first patent issued on April 13^th 1880 to George Eastman for dry plates for use in photography expired 17 years later. However, the trademark Kodak® and the yellow and black –trade dress distinguished patented Kodak-products for over hundred years later.

Federal trademark registration is a relatively simple, fast and inexpensive process. A trademark can be registered if it is capable of distinguishing the source of the goods or services. In practice, this means that the mark needs to be unique to the extent that it is not confusingly similar to another existing mark. A trademark may be similar or even same as another existing mark as long as the products and services are so different that consumers would not become confused.

We are often asked what is the difference between the marking ™ and ®. TM can be used in connection with a mark even if the mark is not registered. It is a notice to others of common law trademark usage. Once the mark is registered with the United States Patent and Trademark Office (USPTO) the mark may be marked with ®. Actually, once the mark is registered, it is a good practice to make sure that the mark is always followed by the R in the circle, so as to avoid the mark becoming generic. Sad examples of how a trademark lost its capacity to protect owner’s goods and services are marks such as Cellophane, Dry Ice or Escalator. They all were once registered trademarks, but the owners failed to make sure the names were used only in connection with the products of the owner.

Trademarks, similarly as patents, are geographically limited to the country where the mark was issued. A federal trademark registration in the United States thus gives protection in the United States. If you have your product or service in commerce outside the United States, you may want to consider filing a trademark in the countries you use the mark. An international treaty called Madrid Protocol, provides a chance to claim priority of the trademark application filed in the United States and file a single international application that can be entered in any chosen countries that a members of the Madrid Protocol. The advantage of the Madrid Protocol is that the international filing can be done through the U.S. Patent and Trademark Office. Trademark protection in countries that are not yet members of the Madrid Protocol would require separate trademark filing in each of those countries.

Understanding Patent Rejections

Richard Gearhart — Tue, 03 Apr 2012 12:08:40 -0500

By Harry Du

By all means, rejections are disheartening. We attorneys understand. You spent weeks, maybe months or years, to perfect your invention. You sought the help of a patent professional to file an application, sometime with a hefty fee. You waited anxious for three years. And then, one morning, you get the message from the US Patent and Trademark Office that your application has been rejected. To make matters worse, you labored with the patent attorney to reply to the rejection, only finding out three months later that another rejection, this time with the horrible name FINAL rejection, was handed down. What to do? How to face a rejection? The message I want to convey here is that there are almost always ways to deal with a rejection, even a final rejection. What is more, the main goal here is to understand that rejections, even the so-called final ones, are not necessarily all bad.

First, it is not at all uncommon to get a rejection. More than 75%, and in some technical areas almost 90%, of the patent applications are initially rejected. Why is the rate of rejection so high? To understand this you must understand the patent examination process. In a nutshell, inventors (and their lawyers) desire to get patents for monopoly protection for the invention. So the inventors want the patent to be as broad as possible. Examiners, on the other hand, represent the public to protect their rights against unfair monopolies. Thus, examiners want to make the patents as narrow as possible. Therefore, the inventors, with the aid of their lawyers, tend to write broad claims to get better coverage. Examiners push back by issuing a rejection. The goal of the examiner is to urge the inventor to narrow the claims, thus giving the public more space in intellectual property. A rejection does not mean the invention is bad or worthless, it means that what the inventor asked for is more than the examiner is willing to give.

So it is not necessarily all bad to get a rejection—and the reverse is also true, it is not always so great to get a first time allowance. Maybe the allowance only suggests your claims are so narrow and the protection of the patent, even you get it, is not adequate. When facing a rejection, Don’t panic, try to work with the patent attorney to understand the examiner’s argument and the references cited. In most cases, counterarguments can be made and claims can be narrowed to rebut the rejection. Even a final rejection does not mean the end of an application. There are multiple approaches to deal with a final rejection, which is in some way a misnomer because it only partially limits the way you can reply to the rejection. In addition to arguing back, you can file for a RCE – Request for Continued Examination, file an appeal to the Board of Patent Interference and Appeal, or file a continuation patent application. These methods either move the case out of the examiner’s hands, or remove the “final” status and begin a new round of examination, giving you fresh chances to patent your invention. The detailed strategies to deal with rejections, especially the final one, deserve several blog posts. However, it is always important to remember that there is almost always a way out.

Do I Need a Patent?

Richard Gearhart — Tue, 06 Mar 2012 11:10:55 -0500

If you are a first time innovator who has an idea, such as a consumer product, a question frequently asked is “Do I need a patent”?

To some individuals starting out, the investment in a patent can seem substantial. Perhaps you have an idea for a new consumer product, but are not sure if the project will be a success, and so you are reluctant to spend the money for a patent.

The decision to start any business has to be based on careful thinking and analysis. However, if the decision is made to move forward then a patent may be a useful business tool. In addition, going through the patent process may give the inventor valuable insights.

For example, the patent process usually starts with a search. The purpose of the search is to identify patents filed by other innovators which teach the same the same or similar idea. Finding similar patents is important because a) another patent may be filed that will block your idea from going to the market place and b) another patent may too close to your idea and may block you from getting a patent.

So before going forward with the patent application, it is important to answer the two questions, will I run afoul of someone else’s patent and is my idea patentable? Negative answers to these questions may stop the project in its tracks. But even if the search results are negative and you are disappointed, it is better to know from the start than spend years creating a business only to find out you are violating someone else’s patent.

What if the search results are positive? Should I get a patent?

If the search results are positive, congratulations! In all likelihood you have an original idea.

To patent or not depends on several factors. First, how do you plan to benefit from your patent? Second, what is the product life cycle, i.e., how long will the product be on the market? How will you be able to find potential infringers? The following paragraphs are of course generalizations and you should check with a patent attorney or agent before coming to any particular conclusions.

Many inventors want to license their idea to a third party manufacturer, i.e., grant the manufacturer the right to use their invention in return for royalties. In this case, having a patent is absolutely essential, because without the patent, there is no legal right to convey the invention to the manufacturer. If your plan is to license the invention, having a patent is the way to do it.

If you plan to have the invention made and sell the product yourself, a patent is also a good idea, especially if you have limited resources. Large companies have well developed business and distribution networks and can afford to produce large amounts of product quickly. Having a patent gives you some protection from a company with more resources.

Patents may not be as good an idea if the project life cycle is short. If you think the product will only be on the market for a couple of years then a utility patent may not issue in this time frame while selling your product. There may not be an opportunity to enforce the patent during a short life cycle. If the product is simple, a design patent may be the best type of protection, since they issue from the patent office in less than a year.

Finally your invention must be of the type where finding potential infringers is possible. For example, if you are a dentist and have a new method of filling cavities, it may be difficult to find other dentists that are using your method, because few people would be able to observe the dentist and how he does his work. It is important to be able to identify the use of your invention.

There are many factors, in addition to these that may play into the decision about filing a patent. As always, the decision to file a patent application should be made in consultation with an experienced professional patent attorney or agent.

Patent Reform

Richard Gearhart — Sun, 12 Feb 2012 15:06:54 -0500

Patent Reform

by Susanne Somersalo, Esq., Ph.D.

President Obama signed the new patent law (America Invents Act, 2011) on September 16, 2011. The reform is the largest since 1952, and perhaps the largest since 1836, when the United States moved from patent registration system to patent examination system.

The Congress has debated the need for reform the Patent Act for a long time: five Congresses have discussed the legislative amendments. In adopting the new law the goals set by the Congress were to encourage innovation and create new jobs, improve patent quality, and speed up the granting of patents, to improve the patent holder’s security to preserve his rights and to offer alternatives to expensive court proceedings.

First to file system

The United States has been the last major jurisdiction to maintain the system where the first inventor is entitled to a patent. Everywhere else in the world the first applicant is entitled to a patent. The current U.S -system, which ensures a patent to the first inventor, is known for lengthy and costly interference procedures.

The patent reform will harmonize the United States patent laws with the rest of the world. The change from first-to-invent to first-to-file system sounds like a huge change. However, this change may not change much current practices Large firms and universities have probably long time ago shaped their innovation policies to comply with universal first to file –system. Globalization is today’s trend, and therefore large companies rarely file in United States only. Individual inventors and small enterprises are the groups that most likely would file their patent applications in the U.S. alone. However, small enterprises and independent inventors have never been the group who initiated interference procedures, mainly because of the high costs.

The new law does not, however, quite unreservedly give the first applicant the right to the patent. Congress was obviously concerned that there may be malicious individuals and companies who are trying to steal the inventions of others, hurrying to apply for a patent for an invention which is actually not theirs. In this case there is a procedure for determining the real inventor. Thus, the U.S. actually will adopt a first-inventor- to- file-system.

United States has a pretty unique system where an inventor is entitled to patent even after disclosing the invention, if the disclose took place within one year from filing. Most of the other major countries have a requirement of absolute novelty, meaning that the inventor cannot get a patent if he disclosed his invention before filing. The new law is not going to change this one year period before filing.

Post grant proceedings

A major change in the new Act are the post grant procedures. The new law ensures two procedures to challenge an already issued patent. The first possibility is a Post Grant Review, in which anyone can submit a claim of unpatentability within nine months after the grant of the patent. The argument at may be based on anything which could result in invalidation of the patent. One can use publications, statements, declarations, expert opinions, etc. as support of the claim.

The other option is to file an inter partes -review process any time after the nine months period for post grant review expired. At this point, the opposition can be based only on lack of novelty or on obviousness and only published articles can be used as support.

These new opposition procedures are similar to opposition procedures exist in Europe and Asia, and international companies are already accustomed to these procedures. Yet, this change in the law seems to be the change, which inventors are most concerned about. In the United States inventors are not quite comfortable with the idea that even if the Patent Office has examined and application and issued a patent, it may still be challenged by third parties. Although re-examination has been possible under the old law, a significant difference to the new system is a fairly low standard to file post grant review. Under the old law, the standard for reexamination was that the challenging party had to show that there was a substantially new question of patentability. According to the new law, it is enough to show that it is likely that at least one claim is not patentable. This could be a considerably lower standard than the previously used, although we will have to wait to see how this standard is applied.

The new procedures may affect particularly computer and the software industry. These industries typically include input from independent inventors and small enterprises, while life-science industries usually involve expensive experiments that can be conducted only in larger facilities. There is possibility that larger companies may begin to file post grant procedures against patents of individual entrepreneurs. The new post grant procedures explicitly spell out an option to settle, and this may be a way for larger companies to get licenses. On the other hand this may also be an opportunity for inventors to get their products to the markets.

Improvements in the quality of patents

The new law is intended to improve patent quality. Because the post grant procedures ensure an easy way to get an issued patent into review, it is assumed that any poor quality patent would be challenged. Another way to improve patent quality is that inventors are now expected to file better quality patents in fear of loosing their rights in post grant procedures. On the other hand, the new law may also result in inventors hurrying to file in order to an early filing date, which might not be the way to improve patent quality.

Another possible reason for improvement in the quality of patents is that under the new law The Patent Office received the power to set it’s own fees. This change is intended to ensure that the Patent Office may hire more examiners and establish three new offices. This change is intended to expedite the current intolerably prolonged patent examination and thereby improve the patent quality.

Timeline

The new law will become in place gradually. The first step was increasing fees. All the fees increased by 15% at the end of September. The change to first –to-file will take place in beginning of 2013.

It will remain to be seen what the new law brings along. There are several ambiguous parts in the law, because there are new terms that are not explained. Hopefully the Federal Rules will bring clarity to part of these ambiguities. Regardless of how the rules are written, there will also be new issues to be tried in the courts. It will take easily ten or twenty years before we have case law to address all these issue. Thus, we need to be patient.

FOREIGN FILING LICENSE -WHAT IS THAT?

Richard Gearhart — Fri, 10 Feb 2012 12:00:00 -0500

FOREIGN FILING LICENSE –WHAT IS THAT?

by Susanne Somersalo, Esq., Ph.D.

When an inventor intends to file a patent application in a foreign country before he files the application in his own country, he may need to have a foreign filing license. For a citizen of the United States a foreign filing license would be required when the inventor plans to file his first patent application as a national application in some other country than in the United States, for example in Canada or in European Union countries. Importantly however, filing an international patent application (PCT-application) as a first application does not require a foreign filing license as long as the United States is named as one of the dedicated countries in the application.

Basically by requiring a foreign filing license in situation described above the government reserves a right to monitor national interests in inventions made by a US citizen. A situation where the inventor may not be able to get a foreign filing license would be for example where the invention is related to national security.

Foreign filing license may become an issue also in situations where one of the inventors is a foreign national not living in the United States. As an example we can envision a situation where a research group in the United States collaborates with a research group in China. The Chinese research group consists of citizens of China and the U.S. research group consists of citizens of the United States. The Chinese inventors may prefer filing a patent application in China and the US researchers may prefer filing a patent application in the United States. Provided that both the Chinese and the US citizens contributed to the invention, the names of both the Chinese and the US inventors would need to appear in the applications in China as well as in the US. However, in order to be able to file the first application in China, the US inventors would need to have a foreign filing license from the U.S. Patent and Trademark Office. On the other hand, in order to file the first application in the United States the Chinese inventors would need to have a foreign filing license from the government of China.

Provided that the invention is not such that the U.S. government would regard it to include matters important for national security, the US inventors can get a foreign filing license relatively easily and fast. Receiving a foreign filing license in China may be more complicated and therefore in the above described situation it may be easier for the U.S. inventors to get the license from the USPTO and then file an application in China. Within one year of the filing date in China, the inventors can file a US application claiming priority of the Chinese application.

Situations where a foreign filing license would be required do not occur often, but every now and then they are relevant. In order to handle such situations correctly hiring an experience patent attorney is crucial.

Getting Patent Protection in China

Richard Gearhart — Tue, 07 Feb 2012 14:30:13 -0500

Getting Patent Protection in China

- Contributed by Harry Du

With the rapid development of the Chinese economy and the enormous manufacturing capacities, it is becoming more and more important to get intellectual property protection in China. Although generally criticized for its prevalent IP violations, China actually has been on an improving track in the past ten years. In particular, more and more companies consider it essential to get a patent for their product in China, either to protect its manufacturing base or a vast market, or both.

Before sending a patent application into the People’s Republic of China (PRC) Intellectual Property Office, China’s central authority for patent examination and issuance, it would be beneficial to understand the general patent categories and the basic application process in China.

Under the PRC Patent Law, there are three major types of protections that may be granted to an invention: patent, utility model, and appearance design.

A patent in China is similar to a utility patent in the U.S. It is a robust monopoly granted to an invention after some rigorous examination process. Same as its U.S. counterpart, a PRC patent provides 20 years of protection from the date of filing the application. The overall examination process for a patent application includes five stages: acceptance of application, initial examination, publication, substantive examination, and issuance. The substantive examination process, as expected, is the most rigorous and time-consuming step. Overall, from the date of filing to the date of issuance, getting a full-fledged patent in China takes about 2.5 – 3.5 years. As in the U.S., either a product or a method can be patented. The fundamental requirements for granting a patent include: utility, novelty, and non-obviousness.

Utility models have no U.S. counterparts. In essence it is a small patent—a simplified version of patent with less protection and more limitations, but enjoying a simplified examination process. It is much easier to get—there is no substantive examination or publication and it usually takes only about 7-9 months overall. In addition, the requirement of non-obviousness is lower for utility models than for patents. However, a utility model only affords 10 years of protection from the time of filing. Moreover, some important restrictions limit the coverage of utility model: (1) it does not cover methods; and (2) it only covers products with unique design or structures, or a combination of both.

Appearance design, as it is called in China, is essentially a counterpart of the U.S. design patent. It protects the overall appearance of the product, not any underlying functionality or mechanism. Similar to utility model, it does not require substantive examination and the overall application process only takes about 5-7 months. The time for protection for design is 10 years from the date of filing. The key for appearance design is unique appearance, not utility. However, the appearance must be replicable by industrial methods. Therefore, a genuine artistic work is, somewhat ironically, not eligible to get appearance design protection because of the difficulty to produce true replicates.

According to the PRC IPO, the number of patent applications in China has been rising constantly in the past few years. For example, the numbers of applications for patents, utility models, and appearance designs in 2010 are 391177, 409836, and 421273, respectively, demonstrating a general increase of 20-30% for each category compared with just a year earlier, 2009.

Nowadays, with the irreversible progression of globalization, it is essential to make long term plans regarding patent protection. China, as a critical component of the global product chain and market, is becoming more and more important. Please take it into consideration to get a patent in China, especially when it might help your business down the road.

Is your Bowl Bash Legal?

Richard Gearhart — Sun, 05 Feb 2012 14:13:20 -0500

Is your Bowl Bash Legal?

You’ve invited the entire neighborhood over to watch the Giants beat the Patriots on your new 80 inch, LED, viewmongous TV. Are you doing anything illegal?

Well, it depends. “Super Bowl”, “Super Sunday”, “Giants” and “Patriots” are all trademarks of the NFL and their affiliates. The broadcast of the game is copyrighted by them. So does your party violate their rights – and should you be concerned?

The NFL does police its intellectual property diligently – as the Fall Creek Baptist Church in Indianapolis discovered in 2007. They were planning to hold a screening of the Super Bowl and to charge a nominal entry fee to cover costs. However, when Rachel Margolies, an NFL lawyer discovered this – and that the church was planning to project the game onto a screen larger than 55 inches and to also show a film promoting Christian values at the same event, she immediately sent a “cease and desist” letter. Oddly enough, this is a field in which size actually does matter - and 55 inches is the size. The relevant law - 17 USC 1.110 – aka - “Limitations on exclusive rights: exemption of certain performances and displays” states that showing broadcasts using an audiovisual device are exempt if “no such audiovisual device has a diagonal screen size greater than 55 inches”. After much bad press and ridicule as the “No Fun League”, the NFL backed down the following year. They issued a statement clarifying that the league had no objection to churches hosting Super Bowl parties as long as no admission is charged and the game is displayed on "a television of a type commonly used at home". They said nothing about coordination of other messages with the game or use of the term "Super Bowl."

Fortunately, you don’t have to be quite as careful as the Fall Creek Baptist Church, as this exemption also states that turning on a TV in your own house is not a "public performance" under copyright law.

So you're OK as long as you are not doing anything like setting up your TV outside, or charging admission to watch. You can, however, charge for drinks, as most sports bars will be doing on Super Bowl Sunday.

From a business perspective, the important thing is not to use any of the copyright terms in any promotional material. “Get your wings here for Super Sunday” or “10% reduction on all beers for Giant’s fans” could get you in trouble. “Get your wings here for the Big Game” or “10% reduction on all beers for New York fans” will not.

Finally: Our prediction: Giants 34, Patriots 28. But remember, this is not legal advice, just the opinion of the author.

Can You Patent an Idea?

Richard Gearhart — Thu, 29 Sep 2011 07:35:31 -0500

Can I get a patent for my “idea?”

Clients sometimes ask us whether it is possible to get patent for his/her “idea.” The word is somewhat too vague to warrant a definitive answer. Our initial reply would probably be stereotypically lawyer-like: it depends. However, some further explanation may probably provide enough guidance.

When a client asks whether his/her “idea” can be patented, it usually falls into two kinds of situations. In the first category, the idea, though somewhat complete, is an abstract one that cannot be reflected in something concrete, such as a tangible device or a chemical compound. One fine example is a method to evaluate the ups and downs of the stock market. Can the client patent such an “idea?” The second kind of “idea” usually refers to a design or blueprint that is directed to something concrete, but the intended target of the “idea” is far from complete. For example, if the inventor has a detailed, fine scheme to build a remote-controlled paper clipper but the lack of funds made it impossible to buy some parts for now, can the inventor patent his “idea” for the device?

It is no surprise that which category does the “idea” belong to can affect its patentability – the likelihood it can get patent protection. For the first category of “abstract ideas,” the key is proper patent drafting that makes the “idea” fit into the subject matter requirement of patent law. If it is the latter category, the inventor needs to put more consideration into how detailed the “idea” currently is and how likely it will be materialized. This week’s blog post will discuss the first type of “abstract idea,” while the second category will be discussed next week.

For “abstract ideas,” the main obstacle for a patent protection is the subject matter requirement of patent law. Under Section 101 of the United States Patent Act, only “new and useful process, machine, manufacture, or composition of matter” can be patented. An “abstract idea,” in most circumstances, can be considered in some way as a process. However, a pure abstract idea, such as a mathematical formula (E.g. Einstein’s E=mc2), on its own, cannot be patented. On the other hand, a process to calculate, for example, the fluctuation of the stock market, may be patented if the patent application is drafted in an appropriate manner. The federal courts, through the years, have wrestled with the boundaries of patenting an “abstract idea.” In the past few years, the U.S. Supreme Court and the Federal Circuit Court have provided some guidance that is helpful to such an inquiry. All the legalise aside, the most reassuring way to make an “abstract idea” patentable is to associate the idea with “machine or transformation”—as instructed by the Federal Circuit Court. Under this doctrine, an idea, or a process is patentable if it (1) is implemented with a particular machine, that is, one specifically devised and adapted to carry out the process in a way that is not concededly conventional and is not trivial; or else (2) transforms an article from one thing or state to another. For most of the “abstract ideas,” the most straight forward approach is to draft a patent application that directly links the idea to a machine that carries out the idea. It should be noted, however, the “machine or transformation” approach is not the only way to make a process patentable. However, as indicated above, it is probably the most reassuring method. Moreover, to draft such a patent application requires experience and a keen understanding of the invention. It is probably wise to seek professional help to avoid unnecessary delays in getting a patent.

So what about the “ideas” that are directed to tangible devices or compounds but the intended projects are far from complete? For these “ideas,” the key is how concrete and detailed the design or plan is. The major legal obstacle here is the Enablement requirement imposed by Section 112 of the United States Patent Act. Section 112 states that the specification of a patent, the detailed descriptions for the invention, shall Enable “a person skilled in the art” to “make and use” the invention. Here, “art” can be generally understood as the field of technology of the invention. If the patent application does not satisfy the Enablement Requirement, a patent will not be issued.

To better understand the Enablement Requirement, it is essential to get a basic grasp of the underlying rationale of the patent system. Fundamentally speaking, the patent system is an exchange between the inventor and the public: the public, through the government, grants to the inventor or the owner of the invention a monopoly of limited time (currently it is 20 years) to make, use, and sell the invention, in exchange for the disclosure of the invention by the inventor. Naturally the Enablement Requirement comes into play. Without this, there is no guarantee that the disclosure in the patent is sufficient to warrant granting the patent monopoly. The Enablement Requirement is the statutory language to hold the inventor to his/her side of the bargain—a full and useful disclosure of the invention. It is designed to make sure that the public, again through the government, will not be shortchanged.

For an “idea” that is not fully materialized, the patent law does not prevent the holder of the “idea” to get a patent for it. You need not wait to have a prototype remote controlled paper-clipper to file a patent for it, as long as your disclosure enables a “person skilled in the art”—usually considered a general expert in the field, to make one. However, if the “idea” is so vague and amorphous that it will not teach “a person skilled in the art” to build a remote controlled paper-clipper, the government will not grant a patent. As you may realize now, it is impossible to draw a definitive line here without carefully reviewing the “idea.” Moreover, it is also essential to be able to parse the legal definition of “a person skilled in the art” as well as the technology demand to “make and use” the invention. Therefore, it would probably wise to at least briefly consult a patent law professional as some legal expertise is required here.

Sometime a client may ask an important and related question regarding patenting an unfinished design: when is the time of invention—the time of having the “idea,” or the time of finishing making the prototype? If this blog was written a month ago, the answer would have been very complex and confusing. However, as if hearing the voice of the troubled inventors, Congress passed the America Invents Act of 2011 on 9/9/2011 and President Obama has signed it into law on 9/16/2011. Under the revised framework, the U.S. adopts a “first-to-file” system that no longer focuses on the time of invention to determine who the rightful owner of the invention is. The new system emphasizes the time to file the application. If A conceives the “idea” earlier, or even makes the prototype earlier than B, A still loses if B files his patent application first. Therefore, the new patent laws encourage one to file a patent application for his invention as soon as possible. But what is to stop him from filing for something dreadfully premature? That will be the task of the Enablement Requirement, which remains intact under the new law.

– Contributed by Y. Harry Du

November 14-20 is Global Entrepreneurship Week (GEW)

Richard Gearhart — Wed, 24 Aug 2011 14:51:53 -0500

ARE YOU READY?!

November 14-20 is Global Entrepreneurship Week (GEW)

www.unleashingideas.org

Created by the Kauffman Foundation, participation in this event gives you a chance to meet experts, get help, and maybe even win a contest – see a few below.

If you haven’t checked out the Kauffman Foundation website, www.kauffman.org,

you should! The Kauffman Foundation is the world’s largest foundation dedicated to entrepreneurship.

Global Entrepreneurship Week kicks off with start-up weekends in cities around the globe. The US dates and locations are:

November 11-13: November 18-20

Baton Rouge, LA Bloomington, IN

Champaign, IL Boulder, CO

Kansas City, MO Cambridge, MA

New Haven, CT Indianapolis, IN

Princeton, NJ Las Vegas, NV

Seattle, WA Lexington, KY

Orange County, CA

New York, NY

San Francisco, CA

For our clients and friends outside the US, dates and locations for other countries are:

November 11-13 November 18-20

Aarhus, Denmark Cairo, Egypt

Bucharest, Romania Calgary, Canada

Buenos Aires, Argentina Copenhagen, Denmark

Manama, Bahrain Geneva, Switzerland

Skopje, Macedonia Halifax, Canada

Sao Paolo, Brazil

Strasbourg, France

Toronto, Canada

Vancouver, Canada

Warsaw, Poland

The Gearhart Law patent firm is based in the US but we have clients worldwide. Visit us at www.gearhartlaw.com to see the range of languages our team is fluent in.

To learn more about GEW, visit their website at www.unleashingideas.org.

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Some of the GEW contests are:

Startup Open – see their website at www.startupopen.com .

Cleantech Open Global Ideas Competition – see their website at www.cleantechopen.com – this one gives you a chance to win $100,000 in support and services.

Your Big Year – DEADLINE 9/1/11 – travel the world for a year! See their website at www.yourbigyear.com. Even if you miss the deadline, there’s other great info. waiting for you there.

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We hope you find this information useful, and whatever your endeavors, we wish you success!

Elizabeth Gearhart, Ph.D.

Patent Agent

Gearhart Law

How can I do my own (FREE) patent search?

Richard Gearhart — Thu, 18 Feb 2010 21:39:30 -0500

Inventors often ask how they can find patents related to their idea. Patent searching is not especially difficult, although it can be time consuming.

The goal of patent searching is to understand the prior art related to the invention. This serves several purposes. First, it can help an inventor decide if patent protection is worth pursuing. Second, it can help the patent drafter draft broad claims that avoid the prior art.

Prior art constitutes everything that ever happened prior to the date of invention by the inventor, anywhere in the world. It includes not only patents and patent applications, but other publications and products too.

A through patent search includes a review of patents and patent publications outside the US, as well as patents and patent publications outside the US.

The internet provides excellent access for prior art searching. For example, as simple keyword search in Google or Yahoo can locate similar products.

The internet is also an excellent venue for patent searching. There are a number of patent data bases that provide excellent results.

For example, theUnited States Patent and Trademark Office has an excellent data base for searches of US Patents and Publications. For Patents outside the US, good places to look include the World Intellectual Property Organization, website (Patent Scope), the European Patent Office search site Espacenet .

Other free online services include Google Patents, and Free Patents on Line, among others. It is not always clear, however, how secure the free online patent searching data bases are.

The most common approach to searching is to simply type in keywords that reflect the invention, and review the resulting results. Sometimes, however, the search returns too many results. The search can be narrowed by using classifications.

Classifications are the categories that the Patent Offices use to sort and organize patents into groups. Adding a classification to your search can limit your search results and omit extraneous patents that have no relation to your invention. A full explanation of classification searching is beyond the scope of this post, but for the truly dedicated an excellent explanation can be found at the US Patent Office Search Site Classification Help.

These data bases can provide the inventor excellent tools to do their own patent searching. Final decisions about whether to file a patent should always be made in consultation with a patent attorney.

Licensing - The grant clause.

Richard Gearhart — Mon, 08 Feb 2010 15:33:43 -0500

One of the most important clauses in a license agreement is the “grant clause”. The grant clause defines the scope of the legal rights that the patent holder (or “Licensor”) gives to the user (“Licensee”). The scope of the grant clause has significant implications for the commercial use of the invention.

Here is a typical grant clause that could be found in a license agreement – there are many ways to grant rights in a patent, the one below will suffice for illustrative purposes:

“The Licensor hereby grants the Licensee an exclusive, royalty bearing license in US Patent 9,999,999 in the territory defined as the United States.”

The grant clause is full of important information.

First, the grant clause states the license is exclusive. This means that nobody except the Licensee will have the right to make, use or sell the technology. The parties have agreed that only this one user will have the right to commercialize this invention. This is in contrast to a “non-exclusive” license. A non-exclusive license gives the patent holder the right to grant additional licenses to other users. In some cases, the license can be drafted in a way to start as an exclusive license, then change to a non-exclusive license. This can be conditioned to happen if the user does not meet certain conditions of the license, such as minimum sales requirements. Sometimes, the patent holder agrees to give a time advantage to the first user, then after a year open the market to other users.

Second, the grant clause above states that the license is royalty bearing. This means that the user will pay the licensor a fee for the right to use the technology. Usually, the royalty is paid on a per unit sold basis, although other methods of calculation are possible. The royalty can be paid on a net profit or a gross profit basis. Royalty rates, or the percentage paid per unit, can very greatly depending on the product and industry. The percentage is usually an important focal point of the negotiations.

The grant clause also refers to a specific patent, here fictionally referred to as US Patent No. 9.999.999. It could also refer to several patents, a patent portfolio, or even to just one or more claims to a patent. So a license can grant rights in multiple patents as well as

a single patent.

The last part of the clause states the geographical region in which the license is granted. In this case, the grant is in the United States. This can be altered to be a region or territory, or expanded to be global, or a region.

Patent Assignments

Richard Gearhart — Wed, 03 Feb 2010 19:32:00 -0500

Patents are property so, like any property, ownership can be transferred from one person or company to another. A patent attorney can help prepare an assignment for the inventor.

A “patent assignment” is the legal document that makes this transfer happen.

A common type of assignment is the transfer of ownership of the patent or patent application from the inventor to the inventor’s LLC.

In the United States, patents are filed in the name of the inventor. If the inventor has patented the invention, the inventor can keep ownership of the patent in his or her name, or they can make it an asset of an LLC. If the patent or patent application is to be owned by the LLC, an assignment is executed by the inventor and the transfer becomes effective.

If there are multiple inventors on a patent application, then both inventors may assign the patent to the LLC. The LLC document (or operating agreement) can spell out how the profits from the venture are to be allocated.

Inventors often sell their patent as a way to profit from it. An assignment will also be executed if the patent is sold to a third party.

Inventors who invent for their employer may have an employment contract that requires them to assign the patent to the employer. An assignment will be executed in this case. Again, a patent lawyer will help prepare the needed documentation.

Licenses - Introduction

Richard Gearhart — Fri, 29 Jan 2010 14:51:42 -0500

One of the most common ways an inventor can take advantage of their patent is through licensing. A license gives another rights to make, use or sell an invention. However, the patent holder retains ownership of the patent. A license is a bit like a renting a piece of real property. The owner still owns it, but lets another use it, usually for a profit. When it’s a real property license, the payment is called “rent”. If it’s a patent that’s being licensed, the property is called a “royalty”.

Licenses allow the inventor to share in the profits of the manufacturer or producer of the invention. Often, the license will be based on the number of units sold by the producer. This arrangement is advantageous for the producer, since the producer only pays the licensor based on the producer’s sales.

The license can take many different forms and can be tailored to the needs of the parties to the transaction. For example, the license can be exclusive or non-exclusive to the party receiving the license. If the license is exclusive, then only the party receiving the license can make, user or sell the invention, and nobody else. If the license is non-exclusive, then the owner of the patent can license it many different parties.

Patent Infringement

Richard Gearhart — Mon, 25 Jan 2010 12:00:00 -0500

What happens if someone infringes on another person’s patent? The inventor who holds the patent can sue in court for damages. If a judge finds that patent infringement has occurred, the court may rule that the infringing party discontinue production and sales of the product. The court may also award damages to the person whose patent was infringed. Often the cases are settled by the patent attorneys without going to trial and the infringing party pays the other a royalty for the use of the technology.

If you are accused of infringement, or if you find someone infringing your patent, a patent attorney can help you decide how to proceed.

A patent is only valuable if it is enforceable and can withstand the rigors of litigation. Likewise, the patent professional you choose for your patent needs should have an understanding of what can happen to your patent if it ends up in court. There is no substitute for an understanding of how your patent will be challenged by an alleged infringer.

At Gearhart Law, we have many years of litigation management experience, and have learned first hand how your competitors will seek to avoid or invalidate your patent in court. This experience is invaluable in helping you to achieve the best possible protection for your invention.

For example, in the case of Wesley Jessen v. Bausch & Lomb, Richard Gearhart, Esq. was involved in every aspect of the case, including discovery, motions, trial, and appeals, and with the help of other attorneys obtained an injunction preventing Bausch & Lomb from selling it’s product for the life of the patent.

How do I File a Patent?

Richard Gearhart — Fri, 22 Jan 2010 22:06:08 -0500

Many of my clients in New Jersey ask about the steps for filing a patent. There are three main steps to patenting an invention.

First, a global or US patent search is conducted to make sure your invention is original.

Second, the patent must be drafted and filed with the patent office.

The final step is to prosecute the patent.

There are many databases, including the US Patent and Trademark Office (USPTO) website which list published patents. Searching the USPTO site for patents on inventions similar to yours (prior art) is the first step. In order to get an invention patent, your invention must be unique enough to be allowed by the patent office. An examiner at the patent office looks at all the prior art when determining whether to allow your patent. Experienced patent attorneys will make a judgment on what they think the USPTO will allow when evaluating your patent application. The patent attorney will then write your application in a way to maximize your chance of success and, after your review, will file it with the USPTO.

The next step in getting an invention patent is prosecution. The USPTO does not grant a patent just because the paperwork has been filed; the patent attorney must argue the points of the patent with the patent examiner and convince him or her that the invention meets all of the USPTO requirements. Your chances of success in this step are increased if you use an experienced patent attorney who has dealt with the USPTO on patent inventions and is familiar with their requirements.

Need to get an invention patented or conduct a US patent search? Call Gearhart Law today.

Tax Patents and the Law of Unintended Consquences

Richard Gearhart — Sun, 24 May 2009 23:26:26 -0500

Jim Singer in his IP Spotlight Blog ipspotlight.com/2009/05/23/new-federal-bill-seeks-to-ban-tax-planning-strategy-patents/ points out:

On May 21, 2009, Representatives Rick Boucher (D-Va) and Bob Goodlatte (R-Va) introduced introduced a bill that would ban patents that cover tax planning strategies. The bill would amend Section 101 of the Patent Act to provide that a ”tax planning method” is not patent-eligible subject matter. Under the bill, a prohibited “tax planning method” is:

a plan, strategy, technique, or scheme that is designed to reduce, minimize, or defer, or has, when implemented, the effect of reducing, minimizing, or deferring, a taxpayer’s tax liability, but does not include the use of tax preparation software or other tools used solely to perform model mathematical calculations or prepare tax or information returns.

Similar bills were introduced into the House and Senate 2007 and 2008, but the prior bills never got very far.

Interesting question where this will go. With all eyes on patent reform, this seems to fit right in.

On the other hand, does allowing monopolies on tax strategies reduce the availability of those strategies generally? (assuming only one firm can practice them). And if that is the case, then doesn't having a tax patent increase tax revenue for the Federal Gov, since fewer tax practioners can use the strategy? I thought the Federal Govenment was looking for ways to increase, not decrease revenue. Is this the law (pardon the pun) of unintended consequences?

Do you need international patent protection?

Richard Gearhart — Thu, 26 Mar 2009 22:55:28 -0500

So you’ve gotten your patent application on file, the rush and the fuss are over with for the time being, you’ve hit your deadline before the presentation or the trade show. Fortunately the patent decisions have been made now and you can forget about this part of your project at least for awhile. And maybe you take a deep breath, because the financial hemorrhage from the patent work is at least on hold.

But soon you get a letter from your patent attorney advising that the one year deadline is fast approaching and you need to decide whether you want international protection. What do you decide? How do you decide? What countries do you file in? Is worth the money it will cost?

Well the answer to the question “do we need international protection” is a qualified “maybe”.

Obviously, if you don’t plan to do business outside the US, then the answer is a clear “no”. If you get a US patent, you can always prevent people from importing into the US from another country. The US is all you need.

If you plan to sell outside the US, then you want to consider patents in the major markets where you plan to sell. If you plan to sell in Japan, for instance, consider a patent in Japan. That too is obvious.

But just because a patent is available doesn’t mean you want one. Here are some additional considerations.

First, think about the lifecycle of your product. The granting of international patents will lag behind the grant of the US patent by at least two years, in some countries more. It is not usual for foreign protect to take six years or more from the filing date of the US application. With some products it’s hard to predict – for others, the product lifecycle is much shorter. Before spending the money do your best to analyze whether the product will be on the market when the patent is granted.

Unless there is some special consideration, except for Brazil, forget about filing for patents in Latin America (with all due respect), Africa, or the Middle East (although some exception for Israel) and former Soviet bloc countries. These regions have weak patent systems for getting and enforcing patents. In many countries where private ownership principles are weak, the courts and laws do not favor patent holders. Think too about whether you’d be willing to bankroll a lawsuit in one of these countries. That’s not to say that filing in these countries is never a good idea, just that your particular facts should justify it and the filings should be on an exceptional basis.

Still, that leaves North America, Asia, and Europe, all with pretty good patent systems and courts. How do we maximize patent protection while keeping a reasonable budget?

If the product is a consumer product, then going after major markets makes sense. A strong, yet reasonably priced portfolio would include the US, Canada, Europe (Great Britain, France, Italy, Germany, maybe Spain), China, and Japan. This list will cover 90% of 90% of any companies needs. I’ve seen many companies with over 1 billion in sales function perfectly well just filing in the countries on this list. Filing costs, i.e. just to get the application on file in these countries is about $20-25,000 depending on exchange rates and application length. Prosecution costs and other fees can be estimated at 6-8,000 per country spread over 4-5 years. Expect your total bill in the other countries to be about 75-100k, excluding the US.

Many or most of your competitors may concentrate manufacturing in one country or region. For example, India has a large generic drug industry and is a natural place for branded pharmaceutical companies to consider. The electronics industry often files in Korea or Singapore. China is a favorite for general and consumer manufacturing. If you can anticipate where your competitors will make your product, filing a patent there is a great strategy.

Why? Suppose you are trying to stop an infringer. It is cheaper to file an infringement suit where the product is made, (which may only be one country) rather than filing suits in each country where it is sold (which may be many countries).

A very popular way to defer the costs associated with the international portfolio is via the PCT. With the PCT, you can wait an additional 18 months to decide which countries need protection, and defer the most of the costs until that time. Normally, you are required to make international filing decisions within one year of you first filing. The PCT allows you to defer the costs for an additional 18 months for a total of 30 months from your priority date. You can also defer deciding which countries you want to file in until the 18 month period has expired. The cost of the PCT is about $3,000 to $4,000. For this fee you also get a search. The search can help you decide the chances of getting patent the patent allowed.

If you are an individual entrepreneur and your strategy is to license, then a PCT application is a good idea – especially if you plan to license to larger companies that want global product lines. The PCT gives them the option to pursue international protection for your project in the counties important to them. This will make your patents more attractive to a perspective licensee.

As always, before making any international patenting decisions, it is best to discuss first with your patent attorney, as the facts and considerations in each case are different.

Who will read your patent?

Richard Gearhart — Wed, 25 Mar 2009 22:44:12 -0500

You may be surprised to realize your patent has many audiences. The list includes you (the inventor), your inventor peers, Patent Examiners, investors and business people, other lawyers, and in some cases, a judge and jury. A good patent application will effectively address the needs of each audience.

Obviously, the application reflects the inventor’s work and creativity. Often the application will include parts and descriptions written by the inventors, and so has the inventor’s own voice. The patent provider will incorporate as many of the inventor’s ideas and suggestions as possible with the goal of protecting as many variations of the invention as possible. In any case, you, the inventor, should be happy and satisfied with the application's content.

It may also be read by your peers. This happens frequently in highly technical fields, such as biotechnology and engineering. Here a premium is placed on scientific content and accuracy. Most inventors enjoy the feeling of statisfaction that comes when their application publishes and their ideas have become a part of the technical literature. Published patents provide important teachings and are considered an important scientific resource. The publication part of the process helps fulfill the patent systems constitutional purpose of advancing the useful arts and sciences, by making technical knowledge publicly available that may otherwise remain secret.

Another important reviewer is the patent examiner at the US Patent and Trademark Office. The patent examiner has highly regulated criteria that the patent must be met before allowance. The Manuel of Patent Examining Procedure (MPEP) is the reference source for the patent examiner and contains thousands of pages that direct the Examiner though the proper examination of the patent application. The patent must meet the criteria set forth in the MPEP and the patent laws in general including novelty and non-obviousness, as well as numerous other details of a highly complex nature.

If the patent is filed internationally, the patent application must meet the requirements of each patent office in which the application is filed. While there are many similarities in the patent systems world wide, there are also important differences. The patent application should be drafted to be acceptable in as many of these different systems as possible. Issues such as application length and claim type can have dramatic impact on the cost of international protection.

The application will also potentially be viewed by investors and business people as well. If the patent is the subject of a license or sold as an asset the patent may be reviewed by the purchasers or licensees. In addition to the business professionals involved in a transaction, the patent may also be reviewed by another patent professional in the case of licensing, due diligence, or potential litigation. Here, the patent will be closely scrutinized to ensure that it meets all the legal requirements for sound patent protection. The tiniest mistake or imperfection will be uncovered, and potentially exploited.

Finally, if the patent is used against an infringer in court, the patent will be heavily scrutinized by opposing counsel. Parts of the application will need to be interpreted and understood by the judge and jury. Here, clear drafting and concise prose free of obtuse language and jargon will be of great benefit.

A patent practitioner with experience in many if not most of these areas will be in the best position to draft an application likely to address the needs of each of these audiences.